A U.S. court awarded intellectual property firm Vringo, Inc.(NYSEAMEX:VRNG) $30.50 million in damages for patent violations by Google Inc(NASDAQ:GOOG) and other Internet firms.
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The violations related to patents held by Vringo's unit I/P Engine, which was acquired by Vringo. The patents were originally held by search engine Lycos, which sold it to I/P Engine.
According to the verdict issued by the jury - 1. I/P Engine had proven by a preponderance of the evidence that the defendants infringed the asserted claims of the patents.
2. The defendants, which indlueded google and AOL, had not proven by clear and convincing evidence that the asserted claims of the patents are invalid by anticipation.
Vringo had origjnally demanded nearly $700 million as damages but ultimately had to settle for a smaller sum, which was less than 5 percent of its target.
According to the jury, reasonable royalty damage should be based on a "running royalty," and the royalty rate has been set at 3.5 percent. The onetime payment of $30 million should cover Vringo for all past infringements.
Google has the highest liability at $15.8 million followed by AOL with $7.94 million, IAC with $6.65 million and the remaining being split between Gannett and Target Corp.
Whether Vringo will actually get the amount or not is debatable as Google plans to appeal the court ruling.
What is of concern here is the valuation of Vringo's patent portfolio. Vringo as well as its investors were expecting more from the litigation and the reduced pay-out does not augur well for the company.
Shares of VRNG tumbled another 8% after slumping 75 in yesterday’s session post court ruling.